Arafura Resources (ASX:ARU) has taken a significant step toward securing financial support for its Nolans Neodymium-Praseodymium (NdPr) Project through the Australian Government’s Northern Australia Infrastructure Facility (NAIF) initiative.
The emerging rare earths company has now seen its loan application progress through strategic assessment to the due diligence phase – the final stage in the application process prior to NAIF making a final investment decision.
Located 135 kilometres north of Alice Springs in the Northern Territory in a region that suffers from a lack of economic development opportunities, the Nolans NdPr project appears to be a good fit for the NAIF program.
NAIF is a long term initiative of the Australian Government focused on encouraging private sector investment in infrastructure and projects that benefit northern Australia. It offers successful applicants concessional finance from a $5 billion pool of funds. Since 2015 it has dished out more than $1.3 billion to 10 projects in the Northern Territory, North Queensland, and the northern half of Western Australia.
Arafura’s Managing Director, Gavin Lockyer, spoke on the progression of the loan deal and the role it would potentially play in the company’s project funding strategy.
“Arafura welcomes the decision from NAIF to progress the Nolans NdPr Project to Due Diligence. This decision comes on the back of some significant project development milestones including the recent release of the positive results from the Nolans Definitive Feasibility Study (DFS).“
“Export Credit Agencies (ECAs) are likely to be central to our project funding strategy and the decision by NAIF to progress to Due Diligence is an important consideration for the Company’s ongoing engagement with other ECAs and financiers across a number of jurisdictions.
“Nolans is a long-life strategic project which includes significant downstream value adding in central Australia, and in order to maximise the local benefits from the project, we recently commenced the preparation of an Indigenous Engagement and Employment Strategy.”
The news follows the release of the Nolans DFS in early February, which highlighted the project as a low-cost, long-life operation capable of producing up to 10% of the world’s NdPr.
Mining companies that have qualified for NAIF funding include Kalium Lakes, which is developing a potash project in Western Australia’s Pilbara region, Sheffield Resources, which is developing the Thunderbird mineral sands project near Derby in WA, and Pilbara Minerals, one of the country’s leading lithium producers.
This content is produced by Star Investing in commercial partnership with Arafura Resources. This content does not constitute financial product advice. You should consider obtaining independent advice before making any financial decisions.
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